Government waiting for more clarity: FM

THIRUVANANTHAPURAM: State government will manage and meet salary and pension expenses of the current month without using the overdraft, said finance minister K N Balagopal.
Meanwhile, state government is awaiting a clarification from the Centre regarding the logic it applied while calculating the revised borrowing limit of Kerala. Only after receiving the same, the state will initiate further correspondence with the Centre regarding the same.
Balagopal told TOI that if Centre sticks to its decision to cut down the borrowing capacity by Rs 8,000 crore, compared to last year, it will lead to an unprecedented fiscal crisis.
There is still no clarity on whether the Rs 15,390 crore fixed by the Centre, of late, is only till December or up to March 2024.
"The communication received from the Centre mentions both December and 2023-24 while talking about the amount the state can borrow. More clarity is needed on that aspect," Balagopal said, adding that the borrowing permission given by the Centre for the last three months of 2022-23 financial year was paltry. State government was expecting to borrow at least Rs 25,000 crore from the market this year. After current reduction in the borrowing limit, the state can borrow only Rs 15,390 crore from the market. Of this, the state has already raised Rs 2,000 crore from the market. As a result, the amount it can now raise is only Rs 13,390 crore.
In general terms , the borrowing limit is 3% of GSDP and accordingly the state is eligible to borrow Rs 32,442 crore. Last year, the Centre had cut down the borrowing limit by considering the borrowing of KIIFB and KSSP and putting it in the government's account. This year too, the Centre will redraw the borrowing limit by rejecting the state government's claims about the independent existence of KIIFB and KSSP. But, even then, the government was expecting to borrow at least Rs 25,000 crore during the current fiscal with central nod.